Raw materials driving rise in cost of LED industry



Since 2020, under the influence of the soaring supply chain and raw material prices, LED lighting companies have generally responded: PC materials, aluminum substrates, steel, aluminum, copper parts, cartons, foam, cardboard and other raw materials have continued to rise sharply. It has been unable to overcome the cost pressure caused by rising raw material prices. Companies in the LED industry have successively issued price increases notices. At present, the overall profitability of domestic LED lighting companies, especially general lighting companies, is very poor. Many companies are in an awkward position, not increasing revenue or increasing retention, but no profit.

The continuous increase in raw material and labor costs has given birth to domestic LED companies starting to increase their prices. Rising raw material prices will undoubtedly have the most obvious impact on LED companies. Since the second half of 2020, the delivery period of certain raw materials has been extended, and even the shortage of driver ICs has forced the company to purchase raw materials at high prices while extending the delivery period of the final product.

After entering March, many first-tier brands have also issued notices of product price increases. According to market news, Foshan Lighting decided to increase the sales prices of LEDs and traditional products in batches on March 6 and March 16. To this end, Foshan Lighting said that due to the continuous growth of product raw materials and production and operation costs, the company deliberately adjusted the prices of LEDs and traditional products in its distribution channels.

There are also many reports on the impact of price increases caused by rising raw materials in the world:

<Irish Independent>: Raw materials and tariffs make the cost of goods soar



<Reuters>: Demand rebounds, Chinese factory prices rise


Post time: Mar-24-2021